S.A. Advisory E-Mail Update
May 03, 1999
Subject: New BUY RECOMMENDATIONS-MCTLC & RINT-MAY 3,99 www.saadvisory.com
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NEW BUY RECOMMENDATIONS
Our phone service investors were informed today: BUY MCTLC(nasdaq) and RINT(otcBB)
During the afternoon our paying E-mailer's ( $125.00) were informed via e-mail to by
MCTLC & RINT
Phone service either $550 or $1100/per ---questions 801-272-4761
MCTLC (NASDAQ) CORPORATE PHONE 9094564321
The company designs, manufactures and distributes a wide range of electronic hardware products
and provides related services primarily to the tlecommunications industry.
55% product sales to customers in the telecommunication industry including, AT & T, "RBOCs"
and France Telecom.
One of the subs, namely, Digital Transmission System,Inc-sells principally to wireless telephone
service providers.
The remainder of the sales are various information technology products for industrial, medical,
miilitary and aerospace application.
Note: When the next "hardcopy" newsletter is released RECOMMENDATION will be expanded concerning
products. One can visit http://www.sec.gov and review 10K for MCTLC
The FACTS:
Fully reporting with SEC
16.4 million shares outstanding as of March 26,99--Recently 4 million share were converted
from outstanding Preferred issue.
cash as of Dec 98----$572K
Long term debt-------$2.2 million
Book value --------$5.5 million ( includes $1.7 million goodwill) The book value minus the
goodwill equals .23 or .33 including the goodwill.
employees--303
Earnings due out for first quarter--on or about May 15,99--we assume a loss!
Delisting from NASDAQ---most likely May 17,99---stock price too low as required
shareholders---3709
Management controls --2.7 million shares
Federal net operating loss carryforward--NOL --$45,000,000.00---extremely valuable!!!!!
Stock range: 96 97 98 99
$1.06-$9.375 $1.15-$3.4375 $.375-$1.62 .25-$1.15
REVENUE AND EARNINGS ACTUAL AND ESTIMATED
97A 98A 99E
SALES $43 MILLION $37.2 MILLION $45 MILLION
INCOME/SHARE
(LOSS) (.96) (.10) .07
We recommended this situation today at around the .375 level! In our opinion this situation
resembles a classic turn-around. The company is introducing new products and removing or
selling divisions that don't fit or that are losing money.
In a conversation with management: We at S.A.Advisory have been able to develop a rev and
income model that can be achieved by MCTLC for 99..It is possible that our numbers may
be to conservative!
Note: First quarter due out soon will be a loss! According to management it is alway a loss!
Budgets are formed during the 1st quarter and then spending occurs during the second quarter.
The third quarter is somewhat slow--due to summer vacations and corporate closing for vacations.
The fourth quarter is usually very good because the companies must spend the monies that have
not been spent during the year. This is a somewhat cyclical in nature!
Based upon the estimated values -it is easy to conclude that MCTLC is only trading at an
estimated PE of 5.35X 99 earnings. MCTLC will grow by atleast 12 to 15 percent during 99
over 98 sales. If we assign a PE value based upon growth rate then a share valuation of
.84 to $1.05 would surface. This ofcourse is very conservative! At present MCTLC has
an est. PSR of .13--This number ofcourse is extremely low and could easily be atleast
1 times sales and still be very undervalued ( note many Internet issue have PSR in the
hundreds and PE values in the hundreds or none at all!!!Food for thought)
Concerning Book value: Could easily trade at 4 to 5 time the stated value !
We believe that for .375 an investor is buying a great turn-around candidate with huge
upside potential with very limited risk! This is a real company--many internet situations
that are trading at 100X MCTLC's price will never achieve the rev and earnings that MCTLC
will probably deliver this year! This company is trading at its 52-week low as well as
5-year low, has book value, large rev base when one considers the price, limited debt, new
products, large NOL, limited exposure, a technology company, nasdaq listing ( may be delisted)
and totally underfollowed.. We think that this situation should be considered as a CORE
HOLDINGS for mini-micro-cap risk investors looking for discounted value with very low downside!
We intend to monitor MCTLC for % gain performance..
NOT: We really do not care if the company is delisted from NASDAQ--The price already indicates
that it has already happened!
Mike chesler-broker---800-890-1629
NEW RECOMMENDATION #2
Reality Interactive,Inc (rint-otcbb) phone # 612-253-4700
As of April 30th this company intends to become a Corporate Shell and is looking for a technology
or Internet related company.
The Shell can be very rewarding for investors if ofcourse the right deal comes along. After
talking with management a number of times--We believe that considering the current price of
only .06( price that it was recommended at -that the upside potential could be HUGE!)
The facts:
4.68 million share outstanding
management owns atleast 700K
no debt
after operations cease - company should have a atleast 200K plus
fully reporting with SEC
NOL--$14.6 million --very valuable*******************************
Insider warrants---3.3 million -which could be used to raise $ MANY MILLIONS
stock range 97-.25-$1.50 98 .04-.78 99 .04- .50
The stock is trading close to 52 week low and 3 year low
We intend to monitor this unusual situation in our newsletter for % gain performance.
If the right deal comes along the Sky is the limit!
We think that this is a GREAT speculation!!!
Broker contact: Mike Chesler: 1-800-890-1629
Disclaimer: We have not been paid by either company for our recommendations!
We may buy, sell and or hold a position in either security at any time!
Before investing in any situation-please review all SEC filings and call the
company with questions.